Never miss an update

Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7

Item specifics

New with tags: A brand-new, unused, and unworn item in the original packaging (such as the original box or bag) ... Read moreabout the condition
Material: Flyknit
Product Line: Nike VaporMax Size: 10
Closure: Lace Up Shoe Type: Sneakers
Brand: Nike Colour: Black, teal and hot pink
Never miss an update

Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7 -

    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7
    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7
    Nike Free RN CMTR 2018 [AA1620-200] Men Running Shoes Diffused Taupe/Guava Ice , Puma TSUGI JUN Sport Stripes Violet White Peacoat Red Limited Edition 367519-02Puma Tsugi Cage Ignite White Black Men Running Shoes Sneakers 365394-02Adidas Originals Gazelle [BB5480] Men Casual Shoes Dark Grey/WhiteNike Dunk High Premium SB Concepts Stained Glass Gym Red/Black-White 313171-606 , Adidas Originals Samba OG [BZ0058] Men Casual Shoes Black/WhiteNike Air Vapormax R Midnight Fog Blue Men Running Shoes Sneakers AJ4469-002[bargain] Brooks Purecadence 3 Mens Running Shoes (D) (600) | RRP $220.00NIKE MENS RETALIATION TR COOL GREY BLACK SHOES **FREE POST AUSTRALIA , NIKE CORTEZ LEATHER BLACK WHITE MENS LIFESTYLE SHOES **FREE POST AUSTRALIADiesel Shoes D-Kallien Boots Men Red New , Nike Jordan DNA LX [AO2649-401] Men Casual Shoes Navy/Sail , * BRAND NEW *Brooks Ghost 9 Mens Running Shoe (D) (442) Free AUS ShippingSupra Malli Mens Camouflage Textile & Suede Trainers , Ted Baker Quana Mens Light Grey White Leather Trainers , Mizuno Wave Inspire 14 Mens Running Shoes (D) (09) **FREE AUS DELIVERY** , Asics Volley Elite FF MT [B700N-600] Men Volleyball Shoes Samba/Silver , Nike Air Zoom Structure 21 Dark Sky Blue Crimson Men Running Shoes 904695-406 , Asics Tartherzeal 5 [TJR288-3801] Men Running Shoes Lapis/WhiteReebok DMX Series 1600 Black Grey White Gum Men Casual Shoes Sneakers CN7737Brand New | Brooks Adrenaline GTS 18 Mens Running Shoes (D) (026) , ASICS GEL-Netburner Ballistic MT Men's Badminton Volleyball Shoes B508Y-4923ADIDAS MENS COPA SNEAKER BLACK WHITE SHOES **ALL SIZES BEST SELLERMizuno Wave Creation 19 Black Blue Men Running Shoes Sneaker Trainer J1GC1701-05 , Nike Air Max2 CB 94 Low Basketball Mens Barkley Shoes Black Carbon 917752-003Nike Metcon 3 [852928-002] Men Training Shoes Black/BlackMENS ADIDAS PREDATOR INSTINCT SOFT GROUND MEN'S FOOTBALL BOOTS STUDS SHOESMizuno Wave Emperor Lightweight Training Running Black/Black/Yellow J1GA167689Nike Air Jordan Future [656503-623] Basketball XI Infrared 23/White
    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7 ->Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7 -
    Dansko Exotic Colors Snakeskin Print Slip Clogs Stapled Mules Womans 41 US 10 M , Men's/Women's Women's Touch Ups Formal Heels High grade new finePLEASER Clear Stripper Shoes Ankle Strap Sandal Rhinestone STARDUST-808T Black , EMILIO PUCCI SHOES sandals heels pumps peep toe cork heel sildes 38.5Stuart Weitzman Women's Idol Pumps Oasis Metal Madras Leather Size 8 M , Nike Wmns Benassi JDI Print Black/Summit White Sandals Slippers 2018 618919-020 , Betsey Johnson Womens Livie Satin Open Toe Special Occasion Ankle Strap Sandals , Roman Gladiator Women Flip Flops Beach Rivet Rhinestone Sandals Boots Flat ShoesJimmy Choo Emily 65 Glitter Fabric Sandal, 40, MetallicGentlemen/Ladies Nike Air Jordan Retro 3 2007 Year-end special promotions new German OutletsSkechers Sport Mens Skech Flex Power Alley Oxford, Light Gray/Lime, 10 M USMen's Adidas Terrex CC Voyager BB1891 Grey/Black/White Sneakers Sz 11.5 MNEW MENS HOKA ONE ONE CLAYTON 2 RUNNING SHOES -9 / /3 - AUTHENTIC - $150 , Nike LeBron XI Max Low Dunkman James 642849-200 Basketball Shoes Men's 11 new , Air Jordan 29 Basketball Shoes Size 11.5 Green Teal Blue Sneakers , new $995 DSQUARED2 DAN BOOT VITELLO VINTAGE PREMIUM DESIGNER MADE IN ITALYNEW STEVE MADDEN SCROOGE BLACK BOOTS MENS 11 ANKLE BOOTS , Ted Baker London Hontaar Wingtip Oxford, Suede Upper, Brown, US 9, NewUnder Armour Ignite VII Slide Women's Black/Brilliance/White 319004 , Mephisto Men's Rafael Fisherman Sandal - Choose SZ/ColorReebok Classic Leather Met Diamon White/Gum BD4423 Women's SZ 9 , NIKE WMNS SZ 10.5 AIR JORDAN 1 RE LOW LIFTD (AO 1334 901) MTLC RED BRONZE , NIKE W Nike Air Zoom Strong 2 Mtlc 922876-001 BLACK Size 6.5 , Nike Girls Air Jordan 3 Retro GG Black/Metallic Gold-Teal Leather Size 9.5YMaterial Girl Womens Capri Closed Toe Knee High Fashion Boots COGNAC Size 11.0Jessica Simpson Women's Baiden Riding Boot Slater Taupe 7 M USSexy Womens Stiletto Pointed Toe color stitching high heel nightclub ankle boots , LFL Lust For Life Maven Black Take Me Higher High Heel Over Knee Velvet Boots , Aerosoles Womens My Way Closed Toe Ankle Fashion Boots Grey Size 10.5 , PLEASER Blondie-R-1008 Series 6" Heel Sexy Exotic Ankle-High Boot ,
    Will ETFs cause the next market crash?
    ETF Watch - Jun 29, 2017
    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7 -

    There’s no doubt that the last 2 years has seen the coming of age of ETFs. With what was once an unknown type of investment quickly becoming a $30b industry in Australia ($3 trillion globally). However, as ETFs have moved from the unknown to the flavour of the month, an increasing number of commentators have called on the risks ETF investors face, with some even stating that ETFs will be the source of the next market crash. Today we take a look at some of the claims as to why some believe there are so many risks associated with ETFs.

    Claim 1: ETFS are blindly pushing up stock prices

    Many have written about share markets being at record highs. In an interview with the AFR, Wilson Asset Management chief Geoff Wilson discussed his portfolios’ current high weightings to cash due to concerns of market over-valuations. 

    US based fund manager FPA capital called ETFs “Weapons of Mass Destruction”and stated “The flood of money into passive products is making stock prices move in lockstep and creating markets increasingly divorced from underlying fundamentals”. The argument they make is as ETFs blindly invest in stocks in their chosen index and ignore the underlying fundamentals of these companies. This causes these companies prices to be bid up to prices that do not support their fundamentals (ie a bubble), and eventually history repeats, the bubble bursts and markets crash.

    What do we think?

    ETFs account for around 10% of US stocks’ market value and less than 1% in Australia. In the US at least this is not an immaterial amount. However, the active managers whom ETFs have taken business from generally have mandates which force them to invest a certain percentage in the market. As a result, active managers have always been investing in expensive markets and pushing up prices. Additionally, what is currently called by many analysis as expensive equity markets could also be attributed to global record low interest rates rather than an uptick in passive investing. In saying that, since the last major market crash (the 2008 GFC), the proportion of total assets in ETFs are considerably higher and continual growth of passive investing must be considered as a possible cause of markets becoming expensive.

    Recently we’ve seen Vaneck reweight their huge Junior Gold Miner’s ETF as they approached 20% limits in some of their smaller holdings. This meant selling out of these small gold miners which saw large falls in some of these shares (some of which was blamed on hedge funds looking to capitalise on the opportunity). This is a great example of the influence that ETFs can have, albeit this is at the small end of the market.

    Claim 2: ETFs will sell on mass and compound market falls

    One of the known weaknesses of a managed fund structure is the ability for investors to fairly easily redeem their funds, meaning at times of market falls, when a fund manager may find the best investment opportunities, the investors in the fund are panicking and redeeming their investments, meaning the fund manager becomes a forced seller rather than a buyer. This was one of the reasons Forager decided to turn their Australian Share Fund (FOR) into a Listed Investment Trust, where the pool of capital for them to invest was guaranteed.

    The one thing stopping simple redemption of managed funds during market crashes is another one of its weaknesses, which is managed funds are not simple to trade, and require the investor to apply to the fund to redeem units. This can involve filling out paper forms, and an apathetic investor may simply not be bothered.

    What do we think?

    One of the greatest advantages of ETFs is also one of its weaknesses when it comes to the above, with ETFs able to be traded on the ASX, a panicked investor simply has to log into their online brokerage account and hit the sell button. If a buyer does not exist on the other side of the trade, the ETF issuer is forced to then sell the underlying holdings which could very well begin a contagion effect.

    However, we come back to the size of the ETF market, at around 1% of the Australian market and 10% of the US market. Investors selling underlying stocks that they own through their broker will have the exact same impact as the reasonably small proportion of ETFs. We believe the actual impact of this event would be not materially higher than what currently exists.

    Claim 3: ETFS with low liquidity will be hard to sell if markets fall

    Peter Switzer recently spoke about a client who had received advice that an ETF with low liquidity would be difficult to sell if markets fall. The argument being that without a liquid market the seller would be unable to find a buyer on the other side of the trade and would need to sell at a significant discount.

    What do we think?

    One of the somewhat unknown components of ETFs is the role of the market maker. Essentially the market maker’s role is to provide liquidity to an ETF, so that if there is not an existing ETF unit on the other side of an ETF trade, the market maker must create an ETF unit for a buyer, or absorb an ETF unit for a seller. It is then the ETF issuer's role to buy or sell the underlying assets that the ETF holds. This means that regardless of an ETF’s liquidity, a market maker will always exist to buy an ETF off an investor even if the markets in free fall.

    However, there is a caveat to the above. Market makers make a profit by charging a spread between the buy price and the sell price of an ETF. The spread becomes the market maker’s profit margin. In a free falling market it may be difficult for the market maker to price the underlying investments forcing them to create a huge spread between the buy and sell price to protect their margins. This was seen in the 2015 Dow Jones ‘Flash Crash’, where some ETFs dropped 30% when the market makers were unable to price the underlying securities.

    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7 -

    Finally, an ETF is only ever as liquid as its underlying holdings. ETFs which invest in illiquid investments may have great liquidity, but if the underlying investments do not, this will likely be reflected in falls in both the underlying holdings and the ETF during market falls. This may be more likely to play out at the small cap end of the sharemarket and within unlisted asset classes.

    Claim 4: ‘Exotic’ ETFs are higher risk

    In a recent RBA publication, economist Michelle Cunningham discussed the risks faced with some of the more exotic ETFs, those that are classed as ‘synthetic’ ETFs, meaning the ETF issuer does not hold the underlying investments, rather they rely on a counterparty to pay the return. These ETFs are generally referred to as ‘Synthetic’ or ‘Hedge fund’ in their title. Cunningham raised the risk that the counterparty may default on their obligation, so an additional level of risk exists for the investor.

    What do we think?

    We agree with Cunningham’s analysis, an additional level of risk certainly exists with these ETF structures, however in many cases this is the only way to access to investment strategy that the ETF provides. Nevertheless, investors should be aware of the additional risks that exist.


    There’s plenty of arguments in both camps about ETFs role in future market crashes. There’s no doubt the world has moved into uncharted territory with the rise of passive investing & ETFs in particular. We do believe, however, that some of the risks are overblow. Nevertheless, investors should be aware of these risks in order to make informed investing decisions. What do you think?


    Previous Article

    2017 Financial Year ETF and LIC Performance Table

    Next Article

    New Fixed Interest ETFs expand options for investors

    Leave a Reply
    Find a Fund
    Nike Men's NEW Size US 10 10 BRAND US NEW Nike Vapormax Flyknit 2 (includes box) $280 NEW 33cb8c7
    Athletic Shoes